Nuclear and clean energy advocates warned that cuts Elon Musk’s Department of Government Efficiency is considering for the Department of Energy‘s Loan Programs Office could backfire on the Trump administration’s energy dominance and artificial intelligence agenda.
In a letter sent to Energy Secretary Chris Wright on Monday, 30 policy think tanks, clean energy companies, and nuclear energy firms asked DOE to protect the LPO from mass cuts.
The groups said the spending reductions under consideration would damage LPO’s critical role in financing domestic energy projects, including those supporting new nuclear generation, domestic mineral production, and modernizing the grid.
“The office’s ability to underwrite and monitor large-scale energy projects depends on specialized technical staff and institutional capacity,” the letter, first obtained by the Washington Examiner, says. “Without them, the federal government risks slowing or stalling the diverse mix of energy projects that serve national priorities, such as new nuclear energy development for powering AI data centers — undermining investment certainty and weakening American competitiveness.”
Signatories included advanced nuclear tech company Oklo, the American Conservation Coalition, Invenergy, the Direct Air Capture Coalition, the Oppenheimer Project, Stand Up for Nuclear, the Center for Climate and Energy Solutions, the Breakthrough Institute, and more.
Last week, it was revealed that the department had extended its “fork in the road” deferred resignation program first offered to federal employees in February. The program allows employees to resign from their positions immediately while receiving full benefits and paychecks through September of this year.
While roughly 77,000 federal employees accepted the initial offer, few employees within DOE took the deal including when it was offered again at the end of March. This seemingly prompted Wright to extend the program, Heatmap reported.
In an email regarding the resignation program deadline sent to employees on April 8 viewed by the Washington Examiner, Wright encouraged more staffers to opt into the deal.
The secretary warned it was “increasingly likely” the Energy Department would undergo a sweeping reduction in force, aligning with President Donald Trump’s priorities to downsize the federal government.
The deadline to opt into the resignation program was extended until Friday, just before midnight.
Between the resignation program and possible layoffs, sources told Heatmap, the department’s LPO could lose up to half of its staff. Major cuts like this to the office would likely severely hinder its ability to originate new loans and support new projects, one department employee told the Washington Examiner.
The employee said the DOGE-led efforts to downsize the agency could hinder the administration’s broader policy objectives and interest in supporting new technology to get ahead in the AI race.
In the letter sent to Wright on Monday, the energy groups pointed to a number of key projects LPO has financed that align with the administration’s priorities of reducing electricity costs, boosting domestic energy production, and supporting American manufacturing.
This includes a $1.56 billion loan guarantee to Holtec International, supporting the restart of the Palisades Nuclear Plant in western Michigan; a $1.81 billion commitment to Arizona Public Service for transmission upgrades, solar deployment, and battery storage; a conditional commitment of up to $4.9 billion for a 2500 megawatt transmission line known as the Grain Belt Express project; and a $1.44 billion loan guarantee to Montana Renewables for expanding production of synthetic aviation fuel.
“We respectfully urge you to preserve LPO’s robust financing capabilities,” read the letter, which was coordinated by the Foundation for American Innovation’s infrastructure director, Thomas Hochman. “As your administration advances its energy and industrial agenda, maintaining the Loan Programs Office will be critical to delivering results.”
If the LPO does see major cuts, the agency would still be able to service all loans with statutory obligations. But it would likely not be able to start new projects, employees said.
A Department of Energy spokesperson said that as of Friday they did not have any final numbers to report on how many people had opted into the program, as all requests are subject to approval.
Certain employees, such as those working safety, national security, law enforcement, or other essential roles, may not be approved for the deferred resignation program, the spokesperson said.
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Regarding other possible reorganization plans, such as mass layoffs, the spokesperson said the agency is “conducting a department-wide review of its organizational structures to ensure operations are best positioned to accomplish the DOE mission and align with the Trump administration’s priorities.”
“The American people provided President Trump with a mandate to govern and to unleash affordable, abundant, and secure American energy,” the spokesperson continued. “No final decisions have been made and multiple plans are still being considered.”
